How to increase profit margins at an eel restaurant | A detailed explanation of a case study that increased monthly sales by 5 million yen

Have you ever wondered how successful restaurants that offer eel at low prices, despite its high cost of production, make a profit?

Even within the same eel restaurant, profit margins can vary greatly depending on how operations are structured and how ingredients are managed.

This article focuses on the business model unique to eel restaurants and the methods for increasing profit margins. In addition, we will also introduce the use of rapid freezer have been introduced at eel restaurants that have increased monthly sales by 5 million yen, as a specific method for increasing profit margins.

For those who are considering opening an eel restaurant or those who want to increase their eel restaurant's profits, you can learn about the challenges of running an eel restaurant and the key points to efficiently increase profits.

Characteristics of eel restaurants

Unagi restaurants are traditional Japanese restaurants that have been loved by many people for a long time.

As specialty restaurants have become increasingly popular in the restaurant market in recent years, eel restaurants that offer delicious, high-quality eel at reasonable prices have been gaining attention. Eel restaurants are known for their unique cooking methods and serving styles, but it is also true that they also have their own management shortcomings.

Let's take a closer look at some of the specific features and challenges that exist.

There is a clear peak season

Japanese people have inherited a culture of feeling the change of seasons through food. As the word "unagi nobori" (eel climbing), suggests, eel is said to be an auspicious food that brings good luck, good fortune, and wealth, making it an essential food for celebrations and other special occasions.

Among them, eel restaurants see their sales peak during the two summer days known as "Doyo no Ushi no Hi" (First Day of the Ox) and "Nino Ushi no Hi" (Second Day of the Ox). It is important to avoid losing opportunities during this time and to be able to fulfill all orders.

It has an image of being a high-end store.

Eel has the image of being a luxury food, and the price it is served at is relatively high. Nevertheless, eel is so popular that you will often see people queuing outside restaurants.

Restaurants that serve truly delicious unagi (eel) are always willing to pay a high price to serve it. Also, due to the high-end image of unagi, some restaurants are gaining attention for serving unagi (eel) at reasonable prices.

It takes a long time to serve food (poor turnover)

One of the drawbacks of eel restaurants is the low turnover rate due to the long time it takes to serve food.

In particular, the cooking process at Kanto-style eel restaurants, which involves skewering the eel, steaming it, slowly grilling it over charcoal, and repeatedly covering it with sauce, is time-consuming and labor-intensive.

While this cooking method maximizes the flavor of the eel, it requires a lot of time to serve each group of customers, which tends to result in slower turnover at the restaurant.

High demand for takeout and delivery

Since eel is available as a rice bowl or heavy meal, it is also in demand for takeout and delivery.

Furthermore, there is a drawback to ordering eel at a restaurant, in that it takes time for it to be served, so many people will find it valuable to be able to take delicious eel home with them at a time that suits them and easily enjoy it at home.

There are few craftsmen with the skills to grill eel

Eel restaurants require skilled chefs to prepare eel.

The entire cooking process before serving the eel requires years of experience and skill. This craftsmanship results in the perfect grilling and flavor.

However, this can lead to management challenges such as difficulty in recruiting, difficulty in expanding stores, and higher labor costs than other restaurants.

High cost

Eels are so rare that some species are designated as endangered, and farming them requires a lot of effort and cost, so they are considered one of the most expensive ingredients in Japan.

The high cost of eel is the main reason why the eel served is so expensive. It is said that a major challenge in running an eel restaurant is to keep down the cost of purchasing eel.

What is the profit margin of an eel restaurant?

The eel restaurant business is very popular due to its high price and deliciousness, but it faces many challenges when it comes to profit margins. Surprisingly, there is one aspect of the profit margins of eel restaurants that is very different from other types of food and beverage businesses.

Here, we will focus on the general profit structure of an eel restaurant and consider what type of management will maximize profits.

The profit structure of a typical eel restaurant

The cost of eels accounts for a very high proportion of sales, which has a significant impact on profit margins.

Due to the rarity of eels, the price is subject to fluctuations, and the price fluctuates greatly depending on the season and catch volume. For this reason, cost management is an important factor that determines profit margins.

General balance of interests

The sales of eel restaurants depend on the price and quantity of the products they serve. To serve high-quality eel, it costs a lot of money, but customers accept the high price for eel, which has a high-class image.

Managing this balance well is the key to increasing the profit margin of an eel restaurant. Specifically, it is necessary to lower the cost rate while setting prices that customers are willing to pay.

As you can see from this table, the profit margin of an eel restaurant is heavily influenced by the cost of goods sold and labor costs. Therefore, the key is how to efficiently manage and control these costs.

In addition, costs tend to be higher than in other food and beverage industries, so in order to increase profit margins, it is particularly important to reduce costs and operate efficiently.

What to do to increase profit margins

Although high prices are accepted at eel restaurants, the cost of goods and labor tends to be high, so there are various challenges to overcome in order to increase profit margins. We will explain each of these challenges and the measures to improve profit margins.

Reduce the cost rate

In order to increase the profit margin of an eel restaurant, it is first necessary to reduce the cost rate. However, the price of eel can fluctuate greatly depending on the season and catch.

In order to reduce the cost rate, it is important to review your purchases, negotiate the purchase price, adjust the amount of ingredients you use, etc. You should also consider how to store purchased ingredients so as not to waste them.

One concrete measure is the use of rapid freezer, which allows the purchased eel and other ingredients to be frozen to a high quality and preserved for a long period of time.

If you purchase in bulk when the cost of raw materials is low and freeze it, you can keep it in stock, which is a very effective way to keep costs down.

Reduce labor costs

Labor costs make up a large portion of operating costs, not just for eel restaurants.

In particular, for eel restaurants that require skilled craftsmen, paying the wages of highly skilled craftsmen can be a huge burden. Measures include reviewing the appropriate number of staff and hourly wages, and improving productivity, but reducing labor costs can easily lead to employee turnover and a decline in service quality, so it must be done carefully.

Introducing rapid freezer is also an effective way to reduce labor costs.

By using eel that has already been hand-grilled and frozen by a chef as part of the cooking process, not only can the time required for cooking and serving be significantly reduced with fewer staff, but even staff without special skills can recreate the professional taste and serve it at a time of their choosing.

Increase sales

Increasing sales is also important to improve profit margins. For example, shortening the time it takes to serve food and increasing customer turnover will enable you to serve more customers even during peak times.

In addition, the introduction of take-out and delivery services, which have seen increasing demand in recent years, could also become a new source of revenue.

By utilizing the freezing technology mentioned above to develop frozen products, which are in high demand these days, it will be possible to expand sales channels that do not require manpower or stores, leading to a significant increase in sales.

Introduction of rapid freezer

rapid freezer is a machine that can freeze food evenly into tiny ice crystals by rapidly cooling the food before the moisture inside the food can form larger ice crystals. This allows for high-quality frozen storage while preventing quality deterioration caused by the destruction of food cell walls.

Even after thawing, the food's flavor and texture remain close to that of when it was freshly caught and cooked.

The rapid freezer rapid freezer mentioned in the various measures are an effective means of improving profit margins, but their introduction has the potential to solve a variety of business challenges.

In the next chapter, we will go into detail about what the introduction of rapid freezer enables for the management of an eel restaurant and its specific benefits.

Advantages of introducing rapid freezer

Improving the efficiency of the cooking process

In order to increase sales at an eel restaurant, it is important to shorten the time it takes to serve food and improve turnover rate.

When serving eel in-store, the time from receiving an order to serving can be significantly reduced by rapid freezing eel that has already been pre-cooked (such as lightly grilled), and then thawing it before serving, basting it with sauce, and finally cooking it.

In addition, work can be completed during busy hours at leisure, improving efficiency and the working environment. Furthermore, using high-quality seasonal eel helps maintain consistent food quality, which also contributes to increased customer satisfaction.

Improved turnover rate

By improving the efficiency of the cooking process, the serving time can be shortened, which will ultimately lead to an increase in the restaurant's turnover rate.

By increasing turnover, waiting times during peak times can be shortened, allowing more customers to enter the store. Increasing the number of meals that can be served per day also leads to increased sales.

Increasing the maximum number of meals that can be provided

By introducing rapid freezer, cooked eel can be frozen and stored efficiently, making it possible to cook and store a large amount of eel at once.

This allows us to respond quickly to large orders and urgent orders, and significantly expands the upper limit of the order volume. This advantage will be a great advantage especially during large events or special campaigns.

Reduce opportunity loss

Using rapid freezer will extend the shelf life of food ingredients, allowing you to stock more.

For example, eel that has been carefully grilled by a chef with sauce can be rapid freezing and stored.Then, when an order is received from a customer, the cooked and processed eel can be thawed and steamed for a few minutes in a steamer, making it possible for anyone to easily provide freshly grilled eel that tastes just like it was hand-grilled by a chef.

Expansion of sales channels

By enabling long-term storage, which was not possible before the introduction of rapid freezer, sales to remote areas have become a reality. This allows sales methods other than physical stores, such as takeout, vending machines, mail order, wholesale, and overseas distribution, to enter new markets and improve competitiveness in existing markets.

In particular, sales methods other than store operations are important measures for maximizing operating profit margins, as they do not require the labor costs of manpower and craftsmen or the funds required to set up a store.

Success story of an eel restaurant that introduced rapid freezer

We will introduce the case of an eel restaurant that successfully solved management issues and significantly increased sales by introducing rapid freezer.

At the time, Unagi no Yanagawa, which only served eel dishes at its restaurants, was facing many challenges, including a lack of craftsmen and labor, which resulted in lost sales opportunities, and a lack of funds to open new restaurants.

Because labor shortages have various negative effects, including employee turnover, a worsening working environment, and reduced service quality, we decided to introduce rapid freezer as a measure to improve this vicious cycle.

As a result, by utilizing freezing technology, it became possible to maintain the quality of service while reducing cost rates and labor costs. At the same time, it was possible to solve the labor shortage problem and significantly expand sales channels, thereby significantly increasing sales and successfully improving the operating profit margin.

What aspects of management have actually improved?

Improving productivity by improving cooking processes

In Yanagawa's case, they set up a central kitchen that serves both the store and the factory that produces frozen products, gathering all their skilled eel craftsmen in one place.

During peak times in the eat-in space, the food to be served in the store is prepared, and during slower times, the chefs grill and freeze large quantities of eel for freezing.By establishing a system in which a small number of staff and craftsmen can simultaneously serve food in the store and manufacture frozen products, the company has achieved significant production efficiency even with a small number of workers.

Increased order limit during peak season

By using frozen unagi that has been prepared in advance for cooking, even during events or times when large orders are likely to come in, the time required for cooking and serving has been significantly reduced. This has enabled the restaurant to handle large orders without losing opportunity, leading to improved turnover and increased sales.

Expanding new business areas and sales channels

If we can achieve production efficiency and increase sales while keeping our cost rate and labor cost rate down, we will be able to invest in opening new stores. Furthermore, by utilizing work-in-progress that is made by freezing eels that have already been hand-grilled by craftsmen, stores can operate with just a few part-time or casual staff, without the space or craftsmen required to cook the eels.

Yanagawa has succeeded in expanding his business by using frozen eels and various sales methods. The next section will explain each method and its advantages.

Takeout specialty store

In Yanagawa Unagi, a take-out specialty eel restaurant has opened in a prefabricated building of just 11.5 square meters.

The store does not have a grill, only a steaming facility. The eel is rapid freezing after final cooking in the store where it is prepared, and the takeout store simply steams it in a steamer. This allows even part-timers and other unskilled staff to easily operate the store.

Since the only cooking required is simply heating up pre-cooked eel, the store can be run by just one or two part-time or casual staff members.

In this way, by utilizing technology that allows for the freezing and preservation of high-quality food, it is possible to open a store with minimal initial costs and labor expenses.

Refrigerated vending machine

Yanagawa has also installed frozen eel vending machines outside its stores that have eat-in facilities.

If the eel you eat at the store is delicious, some people will want to buy it as a souvenir to take home. In such cases, you can create a new source of income by selling frozen products in a vending machine that requires no cooking or staff.

In addition, by installing vending machines in areas a little further away where it is difficult to visit the store, customers can enjoy the same taste as in the store without having to visit, which can also help increase brand awareness and expand the business area for the store.

E-commerce sales

Yanagawa developed frozen eel products using his technology to freeze and preserve high-quality food as is, and also started selling them online.

All you have to do is heat the thawed eel in your microwave or steamer at home, so any consumer can easily enjoy delicious eel at home. EC sales are also a source of income that does not require manpower or a store, so it can be said to be a method that can significantly contribute to improving the profit margin of the entire business.

After introducing rapid freezer Yanagawa improved its cooking operations and production efficiency. Furthermore, by expanding sales channels to include takeout specialty stores, frozen vending machines, and mail order, which do not require any manpower or skilled workers, Yanagawa was able to increase monthly sales by more than 5 million yen through methods other than sales at its physical stores.

Conclusion

Eel restaurants are known for their unique cooking methods and serving styles, and eel dishes made by skilled craftsmen are a traditional dish that has been loved in Japan since ancient times. However, the cost of eel is quite high compared to other types of food and beverage businesses, and controlling this cost is essential to improving profit margins.

We introduced a solution to this problem using rapid freezer as a concrete method for saving on food costs, reducing labor costs, and increasing sales, which are basic measures for improving profit margins.

In particular, by utilizing Daybreak's latest rapid freezer, the "Art Lock Freezer," and advanced freezing technology, many benefits can be obtained, such as long-term high-quality preservation of eel, increased turnover and productivity at the restaurant, improved cooking processes, and mitigating labor shortages.

Furthermore, we also provide after-sales support to quickly respond to any concerns or problems that arise after installation, as well as assistance with the development of frozen products with special menu items.

If you are an eel restaurant or other restaurant owner looking to improve productivity and profit margins, or to resolve issues such as labor shortages and improving the working environment, please contact Daybreak Co., Ltd.